Or another way to say it, since it is derived from the non-covered pension, should be inflating by the same rate as the non-covered pension?
The GPO reduces the spousal benefit by two-thirds of the monthly non-covered pension
My non-covered pension has no cola so in "Today's dollars" my pension amount goes down over time. So it starts out at about 37k and over the course of about 40 years goes down to about 10k.
So 2/3 of my non-covered pension should also go down over time? In today's dollars.
However, when I look at the Tabular Projections Income with Todays dollars I see the Social Security income staying constant (even though I'm modeling spousal benefit.) I would expect the Social Security Income to increase as the "today's dollars" amount of the GPO reduction decreases.
Is there a place to put in an inflation number for the GPO reduction amount? Or as it is very possible that I'm not understanding this correctly would welcome any thoughts on that.
Thanks so much for this awesome tool! It does SO much!
TB, it sounds like the current PRC does not correctly model your case because it always does assume that the SS spousal benefit minus the GPO reduction amount is a constant value in terms of today's dollars. I'm sorry to tell you that there's currently no way to modify this behavior. I'm adding this to our candidate enhancement list but, for now, an alternative might be to disable SS spousal benefits by specifying that you are ineligible for SS benefits and then set up an Other Income stream that more accurately models your expected spousal benefits with a fixed (in terms of future dollars) GPO reduction.
Stuart
@smatthews51 Thanks Stuart. Appreciate the advice on how to model and, more broadly, this amazing tool.
If this does get on the enhancement list, I think the user wouldn't enter the amount of the GPO. If the GPO is always 2/3 of the non-covered pension, then it would inflate/deflate along with the pension. The user would simply indicate if the pension is subject to GPO so that Pralana could do the appropriate calculations.
Anyway, this GPO deflation is something that I've long been wondering about and looking at Pralana made it so clear!
Best wishes,
TB
@tb You're welcome! Just to clarify: Are you suggesting that a better way to go might be for the user to specify in the pension section of the Income page that a pension is subject to GPO rather than making any related inputs in the SS benefits section?
Thanks,
Stuart
@smatthews51 Yes, and I'm saying that because the GPO reduces the spousal or widow(er) benefit by 2/3 of the non-covered pension. So, because the offset goes along with that pension, I do think the pension section of the Income page is where to indicate it.
This link to the SSA has a pretty good explanation along with an illustration that helps me visualize it:
https://www.ssa.gov/policy/docs/program-explainers/government-pension-offset.html
I also looked at how opensocialsecurity.com handles it. The user doesn't enter the amount of the offset. There is a checkbox to indicate there is a "Pension from employment not covered by Social Security taxes". Then if the user selects Married, the tool calculates the offset based on the "Monthly government pension (from non-covered employment)".
Best,
TB
